#MyExperienceInTheStates: No Swipe fees To Consumer

The success of plastic money needs a holistic approach from mainly the government putting in new policy, with the banking sector readying itself to accept that usage of plastic money is not a revenue creation model.

Zimbabwe’s banked sector is dogged with multiple bank charges which have eroded any grain of value for the savings account. This move killed the saving legacy which our parents built their lives from.

By Toneo T Rutsito

The American system does not charge the consumer for using your swipe card but instead, the bank charges the retailers a small charge, which then promotes the use of plastic money without any worry for hidden charges

My Experience in the States

Last week,  I explained my shopping experience the where I was rather careless to swipe for almost anything I wanted, a move which would have dearly costed had I done so in Zimbabwe.

The Reserve Bank of Zimbabwe has too many times forced banks to drop their charges which were extremely so high that the banks became the worst link in the financial sector.


One of the most critical issues to affect our banking sector are exorbitant charges, driving massive dissertation which has forced the majority of young business players and most Small to Medium enterprises (SME), to opt out as the unbanked sector.


For a Zimbabwean government which is facing serious cash challenges and trading for years without own currency due to inflation and lack of exports. More policies should have been put in place that promote e-commerce and plastic money.


Infact no one needs cash in this world, except for those doing illicit deals and money laundering. Money is simply a form of transacting to get a service or product, but our government for years has allowed people to want more money than the actual service or goods it acquires because oflack of proper payment systems.

This demands exerts so much pressure to the banks, the bank tellers, the branches and this all is brought back to the RBZ which in actual essence can not supply the money market.

Here is how it works in America.

According to investanswers, Banks work out legal agreements with one of the major credit card companies such as Visa, MasterCard or Discover, as well as EFT networks such as Star, Interlink and NYCE, to become a member bank within their network. The banks then charge a fee to merchants to process these debit and credit card transactions — a certain percentage of which goes to the credit card company and a smaller percentage is paid to the merchant’s bank.

My Experience in the States


$20.5 billion in swipe fees were charged to merchants in 2010.  Now these fees are at the center of debate among lawmakers, banks and merchant unions in the U.S. On one side of the argument are the banks, which claim the swipe fees are necessary to cover the costs of processing transactions and providing fraud protection. On the other side are the merchants and vendors, who claim the rising swipe fees are increasingly cutting into their profits, forcing them to raise the prices on their goods and services.


In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by Congress, and included in the Act was an amendment to address swipe fee reform (the Durbin Amendment). Under this amendment the Federal Reserve is now authorized to review and reform debit card transaction fees.  One such proposal will cap swipe fees at $0.12 per transaction, a 73% reduction from the average charge of $0.44 per transaction. As a consequence, consumers can expect a loss of financial perks like free checking accounts, the end of rewards programs for debit cards and an increase in fees for ATM withdrawals from out-of-network banks.

Consumer affairs stated that In a win for retailers, and perhaps consumers, the Federal Reserve has proposed a new rule that would establish debit card interchange fee standards and prohibit network exclusivity arrangements and routing restrictions.

As a result, those “swipe” fees could drop as much as 90 percent, according to industry analysts. The interchange fee is what the business pays the credit card network each time a customer uses a debit card. The new Fed proposal would cap them at 12…






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